MASTER LEASE AGREEMENT
Dated as of 12/17/98 ("Agreement")
THIS AGREEMENT, is between General Electric Capital Corporation its
successors and assigns, if any ("Lessor") and lnternet Financial Services Inc.
"Lessee") Lessor has an office at 00 Xxx Xxxxxxxxx Xxxx. Danbury, CT O6810)
Lessee is a corporation organized and existing under the laws of the State of
New York. Lessee's mailing address and chief place of business is 00 Xxxx 00xx
Xxxxxx. Xxx Xxxx. XX 00000. This Agreement contains the general terms that apply
to the leasing of Equipment from Lessor to Lessee Additional terms that apply to
the Equipment (term, rent. options. Etc) shall be contained on a schedule
("Schedule")
1. LEASING:
(a) Lessor agrees to lease to Lessee, and Lessee agrees to Lease from
Lessor, the equipment ("Equipment") described in Schedule signed by both
parties.
(b) Lessor shall purchase Equipment from the manufacturer or supplier
("Supplier") and lease it to Lessee if on or before the Last Delivery Date
Lessor receives (i) a Schedule for the Equipment. (ii) evidence of insurance
which complies with the requirements of Section 9, and (iii) such other
documents as Lessor may reasonably request. Each of the documents required above
must be in form and substance satisfactory to Lessor. Lessor hereby appoints
Lessee its agent for inspection and acceptance of the Equipment from the
Supplier. Once the Schedule is signed, the Lessee may not cancel the Schedule.
2. TERM. RENT AND PAYMENT:
(a) The rent payable for the Equipment and Lessee's right to use the
Equipment shall begin on the earlier of (i) the date when the Lessee signs the
Schedule and accepts the Equipment or (ii) when Lessee has accepted the
Equipment under a Certificate of Acceptance Lease Commencement Date") The term
of the Agreement shall be the period specified in the applicable Schedule The
word "term" shall include all basic and any renewal terms
(b) Lessee shall pay rent to Lessor at its address stated above, except as
otherwise directed by Lessor. Rent payments shall be in the amount set forth in.
and due as stated in the applicable Schedule. If any Advance Rent (as stated in
the Schedule) is payable, it shall be due when the Lessee signs the Schedule
Advance Rent shall be applied to the first rent payment and the balance, if any,
to the final rent payment(s) under such Schedule. In no event shall any Advance
Rent or any other rent payments be refunded to Lessee If rent is not paid within
ten (10) days of its due date, Lessee agrees to pay a late charge of five cents
($ .05) per dollar on. and in addition to, the amount of such rent but not
exceeding the lawful maximum, if any.
3. RENT AJUSTMENT:
(a) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, ("Code")), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for calendar-year
taxpayers ("Effective Rate") is higher than thirty-five percent (35%) for any
year during the lease term, then Lessor shall have the right to increase such
rent payments by requiring payment of single additional sum. The additional sum
shall be equal to the product of(i) the Effective Rate (expressed as a decimal)
for such year less .35 (or, in the event that any adjustment has been made
hereunder for any previous year, the Effective Rate (expressed as a decimal)
used in calculating the next previous adjustment) times (ii) the adjusted
Termination Value (defined below), divided by (iii) the difference between the
new Effective Rate (expressed as a decimal) and one (I). The adjusted
Termination Value shall be the Termination Value (calculated as of the first
rent due in the year for which the adjustment is being made)minus the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all future years of
the lease term). The Termination Values and Tax Benefits are defined on the
Schedule Lessee shall pay to Lessor the full amount of the additional rent
payment on the later of(i) receipt of notice or (ii) the first day of the year
for which such adjustment is being made.
(b) Lessee's obligations under this Section 3 shall survive any expiration
or termination of this Agreement.
4. TAXES: If permitted by law, Lessee shall report and pay promptly all taxes,
fees and assessments due. Imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing, possessions, use or operation thereof),
this Agreement (or any rent receipts hereunder), any Schedule, Lessor or Lessee
by law governmental entity or taxing authority during or related to the term of
this agreement, including, without limitation, all license and registration
fees, and all sales, use, personal property, excise, gross receipts, franchise,
stamp or other taxes, imposts, duties and charges, together with any penalties,
fines or interest thereon (collectively "Taxes") Lessee shall have no liability
for Taxes imposed by the United States of America or any state or political
subdivision thereof which are on or measured by the net income of Lessor except
as provided in Section 3 and 14 (c). Lessee shall show Lessor as the owner of
the Equipment on all tax reports or returns, and send Lessor a copy of each
report or return and evidence of Lessee's payment of taxes upon receipt.
5. REPORTS:
(a) If any tax or other to any Equipment, Lessee will notify Lessor in
writing, within ten (10) days after Lessee becomes aware of the tax or lien. The
notice shall include the full particulars of the tax or lien and the location of
such Equipment on the date upon request.
(b) Lessee will deliver to Lessor's complete financial statements, certified
by a recognized firm of certified public accountants within ninety (90) days of
close of each fiscal year of Lessee. Lessee will deliver to Lessor copies of
Lessee's quarterly financial report certified by the chief financial officer of
Lessee within (90) days of the close of each fiscal quarter of Lessee. Lessee
will deliver to Lessor all Forms 10-K and 10-Q, if any, filed with the
Securities and Exchange Commission within thirty (30) days after the date on
which they are filed.
(c) Lessor may inspect any Equipment during normal business hours giving
Lessee reasonable prior notice
(d) Lessee will keep the Equipment at the Equipment Location (specified in
the applicable Schedule) and will give Lessor prior written notice of any
relocation of Equipment. If Lessor asks, Lessor will promptly notify Lessor in
writing of the location of any Equipment.
(e) If any Equipment is lost or damaged (where the estimated repair costs
would exceed the greater of ten percent (10%) of the original Equipment cost or
ten thousand and 00/100 dollars($10,000) or otherwise involved in an accident
causing personal injury or property damage. Lessee will promptly and fully
report the event to Lessor in writing.
(f) Lessee will furnish a certificate of an authorized officer of Lessee
stating that he has reviewed the activities of Lessee and that, to his best
knowledge, there exists no default or event which with notice of time (or both)
would become such default within (30) days after any request by Lessor.
6. DELIVERY, USE AND OPERATION:
(a) All Equipment shall be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that the Equipment will used by Lessee solely in the
conduct of its business and in a manner complying with all applicable laws,
regulations and insurance policies and Lessee shall not discontinue us of the
Equipment.
(c) Lessee will not move any equipment from the location specified on the
Schedule, without the prior written consent of Lessor.
(d) Lessee will keep the Equipment free and clear of all liens and
encumbrances other that those which result from acts of Lessor.
(e) Lessor shall not disturb Lessee's quiet enjoyment of the Equipment
during the term of the Agreement unless a default has occurred and is continuing
under this Agreement.
7. MAINTENNANCE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order and repair, normal wear and tear excepted. The Lessee shall
also maintain the Equipment in accordance with manufacturer's recommendations.
Lessee shall make all alterations modifications required to comply with any
applicable law, rule or regulation during the of this Agreement. If Lessor
requests, Lessee shall affix plates, tags or other identifying labels showing
ownership thereof by Lessor. The tags or labels shall be placed in a prominent
position on each unit of Equipment.
(b) Lessee will attach or install anything on any Equipment that will impair
the originally intended function or use of such Equipment without the prior
written consent of Lessor. All additions, parts, supplies, accessories, and
equipment("Addition") furnished or attached to any Equipment that are not
readily removable shall become the property of Lessor. All Additions shall be
made only in compliance with applicable law. Lessee will not attach or install
any Equipment to or in any other personal or real property without the prior
written consent of Lessor.
8. STIPULATED LOSS VALUE: If for any reason any unit of Equipment becomes worn
out, lost, stolen, destroyed, irreparably damaged or unusable ("Casualty
Occurrences") Lessee shall promptly and fully notify Lessor in writing. Lessee
shall pay Lessor the sum of (I) the Stipulated Loss Value (see under this
Agreement on the Payment Date (defined below) for the affected unit. The Payment
Date shall be the next rent payment date after the Casualty Occurrences. Upon
Payment of all sums due hereunder, the term of this lease as to such unit shall
terminate.
9. INSURANCE:
(a) Lessee shall bear the entire risk of any loss, theft, damage to, or
destruction of, any unit of Equipment from any cause whatsoever from the time
the Equipment is shipped to Lessee.
(b) Lessee agrees, at its own expense, to keep all Equipment insured for
such amounts and against such hazards as Lessor may reasonably require. All such
policies shall be with companies, an on terms, reasonably satisfactory to
Lessor. The insurance shall include coverage for damage to or loss of the
Equipment, Liability for personal injuries, death or property damage. Lessor
shall be named as additional insured with a loss payable clause in favor of
Lessor, as its interest may appear, irrespective of any breach of warranty or
other act or omission of Lessee. The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00)
total liability per occurrence, unless otherwise stated in any Schedule. The
casualty property damage coverage shall be in an amount equal to the higher of
the Stipulated Loss Value or the full replacement cost of the Equipment. No
insurance shall be subject to any co-insurance clause. The insurance policies
shall provide that the insurance may not be altered or canceled by the insurer
until after thirty (30) days written notice to Lessor. Lessee agrees to deliver
to Lessor evidence of insurance reasonably satisfactory to Lessor.
(c) Lessee hereby appoints lessor as Lessee's attorney in fact to make proof
of loss and claim for insurance, and to make adjustments with insurers and to
receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessee's attorney in
fact unless Lessee is in default. Lessee shall pay any reasonable expenses of
Lessor in adjusting or collecting insurance. Lessee will not make adjustments
with insurers except with respect to claims for damage to any unit of Equipment
where the repair costs are less that the Lesser that ten percent (10%) of the
original or replace Equipment cost or ten thousand and 00/100 dollars ($10,0000.
Lessor may, at its option, apply proceeds of insurance, in whole or in part, to
(I) repair or replace Equipment or any portion thereof, or (ii) satisfy any
obligations of Lessor under this Agreement.
10. RETURN OF EQUIPMENT:
(a) At the expiration or termination of this Agreement or any Schedule,
Lessee shall perform any testing and repairs required to place the units of
Equipment in the same condition and appearance as when received by Lessee
(reasonable wear and tear excepted) and in good working order for the original
intended purpose of the Equipment. If required the units of Equipment shall be
deinstalled, disassemble and crated by an authorized manufacturer's
representative or such other service person as is reasonably satisfactory to
Lessor. Lessee shall remove installed markings that are not necessary for the
operation, maintenance or repair of the Equipment. All Equipment will be
cleaned, cosmetically acceptable, and in such condition as to be immediately
Installed into use in similar environment for which the Equipment was originally
intended to be used. All waste material and fluid must be removed from the
Equipment and disposed of in accordance with then current waste disposal law's.
Lessee shall return the units of Equipment to a location within the continental
United States as Lessor shall direct. Lessee shall obtain and pay for a policy
of transit insurance for the redelivery period in an amount equal to the
replacement value of the Equipment. The transit insurance must name Lessor as
the loss payee. The Lessee shall pay for all costs to comply with this section.
(b) Until Lessee has fully complied with the requirements of Section 10(a)
above, Lessee's rent payment obligation and all other obligations under this
Agreement shall continue front month to month notwithstanding any expiration or
termination of the lease term. Lessor may terminate the Lessee's right to use
the Equipment upon ten (10) days notice to Lessee.
(c) Lessee shall provide to Lessor a detailed inventory of all components of
the Equipment including model and serial numbers. Lessee shall also provide an
up-to-date copy of all other documentation pertaining to the Equipment. All
service manuals, blue prints, process flow diagrams, operating manuals,
inventory and maintenance records shall be given to Lessor at least ninety (90)
days and not more than one hundred twenty (120) day's prior to lease
termination.
(d) Lessee shall make the Equipment available for on-site operational
inspections by potential purchasers at least one hundred twenty' (120) days
prior to and continuing up to lease termination. Lessor shall provide Lessee
with reasonable notice prior to any inspection. Lessee shall provide personnel,
power and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment.
11. DEFAULT AND REMEDIES:
(a) Lessor may in writing declare this Agreement in default if: (i) Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section 9, (iii) Lessee breaches any of its other obligations
and fails to cure that breach within thirty (30) days after written notice from
Lessor, (iv) any representation or warranty made by Lessee in connection with
this Agreement shall be false or misleading in any material respect; (v) Lessee
or any guarantor or other obligator for the Lessee's obligations hereunder
("Guarantor") becomes insolvent or ceases to do business as a going concern;
(vi) any Equipment us illegally used. (vii) if Lessee or any Guarantor is a
natural person, any death or incompetency of Lessee or such Guarantor, or (viii)
a petition is filed by or against Lessee or any Guarantor under any bankruptcy
or insolvency laws and in the event of an involuntary petition, the petition is
not dismissed within forty-five (45) day's of the filing date. The default
declaration shall apply to all Schedules unless specifically' excepted by'
Lessor
(b) After a default, at the request of Lessor, Lessee shall comply with the
provisions of Section 10(a). Lessee hereby authorizes Lessor to peacefully enter
any premises where any Equipment may' be and take possession of the Equipment.
Lessee shall immediately pay to Lessor without further demand as liquidated
damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of
the Equipment (calculated as of the rent payment date prior to the declaration
of default), and all rents and other sums then due under this Agreement and all
Schedules. Lessor may terminate this Agreement as to any' or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may, but shall not be required to, sell Equipment at private or public
sale, in bulk or in parcels, with or without notice, and `without having the
Equipment present at the place of sale. Lessor may also. but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment Lessor may use Lessee's premises for a reasonable period of time for
any or all of the purposes stated above without liability for rent, costs.
damages or otherwise. The proceeds of sale, lease or other disposition, if any,
shall be applied in the following order of priorities. (i) to pay all of
Lessor's costs, charges and expenses incurred in taking, removing, holding,
repairing and selling, leasing or otherwise disposing of Equipment; then, (ii)
to the extent not previously paid by Lessee, to pay Lessor all sums due from
Lessee under this Agreement, then (iii) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (iv) any surplus shall be
retained by Lessor. Lessee shall immediately pay any deficiency in (i) and (ii)
above.
(c) The foregoing remedies are cumulative, and any or all thereof may' be
exercised instead of or in addition to each other or any' remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any' advertising Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, Defense or preservation of Lessor's rights and remedies
under this Agreement, or if prohibited by law, such lesser sum as may be
permitted. Waiver of any default shall not be a waiver of any' other or
subsequent default.
(d) Any default under the terms of this or any other agreement between
Lessor and Lessee may be declared by Lessor a default under this and any such
other agreement.
12. ASSIGNMENT: LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY
EQUIPMENT OR THE IN'IEREST OF LESSEE IN THE EQUIPNIENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. Lessor may, without the consent of Lessee, assign this
Agreement,. any Schedule or the right to enter into a Schedule. Lessee agrees
that if Lessee receives written notice of an assignment from Lessor. Lessee will
pay' all rent and all other amounts payable under any assigned Schedule to such
assignee or as instructed by Lessor. Lessee also agrees to confirm in writing
receipt of the notice of assignment as may' be reasonably requested by assignee.
Lessee hereby waives and agrees not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which Lessee has or may at
any time have against Lessor for any reason whatsoever.
13. NET LEASE: Lessee is unconditionally obligated to pay all rent and other
amounts due for the entire lease term no matter what happens, even if the
Equipment is damaged or destroyed, if it is defective or if Lessee no longer can
use it. Lessee is not entitled to reduce or set-off against rent or other
amounts due to Lessor or to anyone to whom Lessor assigns this Agreement or any'
Schedule whether Lessee's claim arises out of this Agreement, any Schedule. any
statement by Lessor. Lessor's liability or any manufacturer's liability', strict
liability', negligence or otherwise.
14. INDEMNIFICATION:
(a) Lessee hereby agrees to idemnify Lessor, its agents, employees,
successors and assigns (on an after tax basis) from and against any and al
losses, damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Agreement, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Lessor's
gross negligence or willfull misconduct ("Claims"). This indemnify shall
include, but is not limited to, Lessor's strict liability in tort and Claims,
arising out of (i) the selection, manufacture, purchase, acceptance or rejection
of Equipment, the ownership of Equipment during the term of this Agreement, and
the delivery, lease, possession, maintenance, uses, condition, return or
operation of Equipment (including, without limitation, latent and other defects,
whether or not discoverable by Lessor or Lessee and any claim for patent,
trademark or copyright infringement or environmental damage) or (ii) the
condition of Equipment sold or disposed of after use by Lessee, any sublessee or
employees of Lessee. Lessee shall, upon request, defend any actions based on, or
arising out of, any of the foregoing.
(b) Lessee hereby represents, warrants and covenants that (i) on the Lease
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of deduction and credit specified in Section C of the applicable
Schedule ("tax Benefits") in the hands of Lessor, and (ii) at no time during the
term of this agreement will Lessee take or omit to take, not will it permit any
sublessee or assignee to take or omit to take, any action (whether or not such
act or omission is otherwise permitted by Lessor or by this Agreement), which
will result in the disqualification of any Equipment for, or recapture of, all
or any portion of such tax benefits.
(c) If as a result of breach of any representation, warranty or covenant of
the Lessee contained in this Agreement or any Schedule (i) tax counsel of lessor
shall determine that Lessor is not entitled to claim on its Federal income tax
return all or any portion of the tax benefits with respect to any Equipment or
(ii) any tax benefits claimed on the federal income tax return of Lessor is
disallowed by the Internet Revenue Service, or (iii) any tax benefit is
recalculated or recaptured (any determination, disallowance, adjustment,
recalculation or recapture being a "Loss"), then Lessee shall pay to Lessor, as
an indemnify and as additional rent, an amount that shall, in the reasonable
opinion of Lessor, cause lessor's after-tax economic yields and cash flows to
equal the Net Economic Return that would have been realized by Lessor if such
Loss had not occurred. Such amount shall be payable upon demand accompanied by a
statement describing in reasonable detail such Loss and the computation of such
amount. The economic yields and cash flows shall be computed on the same
assumptions, including tax rates as were used by Lessor in originally evaluating
the transaction ("Net Economic Return") If an adjustment has been made under
Section 3 then the Effective Rate used in the next preceding adjustment shall be
substituted.
(d) All references to Lessor in this Section 14 include Lessor and the
consolidated taxpayer group of which Lessor is a member. All of Lessor's rights,
privileges and indemnities contained herein are expressly made for the benefit
of, and shall be enforceable by Lessor, its successors and assigns.
15. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED UNDER THIS AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility to Lessee or any
other person with respect to any of the following; (i) any liability, loss or
damage caused or alleged to caused directly or indirectly by any Equipment, any
adequacy thereof, any deficiency or defect (latent or otherwise) of the
Equipment, or any other circumstance in connection with the equipment; (ii) the
use, operation or performance of any equipment or any risks relating to it;
(iii) any interruption of service, loss of business or anticipated profits or
consequential damages, or (iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of any equipment. If, and so long as, no
default exists under this agreement, lessee shall be, and hereby is, authorized
during the term of this Agreement to assert and enforce whatever claims and
rights lessor may have against any supplier of the Equipment at Lessor's sole
cost and expense, in the name of and for the account of Lessor and/or Lessee, as
their interests may appear.
16. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee makes each of the following
representations and warrants to Lessor on the date hereof and on the date of
execution of each Schedule.
(a) Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the "document"). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The document have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or entity with respect to the entry into or performance
by Lessee of the Documents except such as have already been obtained.
(d) The entry into and performance by Lessee of the Documents will not: (i)
violate any judgement, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation on any lien,
charge, security interest or other encumbrance upon any indenture, mortgage,
deed, of trust, bank loan or credit agreement or other instrument (other than
this Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which if decided against Lessee will have a material adverse effect on
the ability of Lessee to fulfill its obligations under this agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each financial statement delivered to Lessor has been prepared in
accordance with generally accepted accounting principles consistently applied.
Since the date of the most recent financial statement, there has been no
material adverse change.
(h) Lessee is and will be at all times validly existing and in good standing
under the laws of the State of its incorporation (specified in the first
sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business
purposes.
17.EARLY TERMINATION:
(a) On or after the First Termination Date (specified in the applicable
Schedule), Lessee may, so long as no default exists hereunder, terminate this
Agreement as to all (but not less that all) of the Equipment on such Schedule as
of a rent payment date ("termination Date") Lease must give Lessor at least
ninety (90) days prior written notice of the termination.
(b) Lessee shall, and Lessor may, solicit cash bids for the Equipment on an
AS IS, WHERE IS BASIS without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS"). Prior to the termination date, lessee shall (i) certify
to lessor any bids received by Lessee and (ii) pay to Lessor (a) the termination
Value (calculated as of the rent due on the termination date)for the equipment,
and (b) all rent and other sums due and unpaid as of the termination date.
(c) If all amounts due hereunder have been paid on the Termination date,
Lessor shall (i) sell the equipment on an AS IS BASIS for cash to the highest
bidder and (ii) refund to proceeds of such sale (net of any related expense) to
Lessee up to the amount of the termination value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the termination
value(less any expenses incurred by lessor) to Lessee.
(d) Notwithstanding the foregoing, lessor may elect by written notice, at
any time prior to the termination date, not to sell the equipment. In that
event, on the termination date lessee shall (i) return the equipment (in
accordance with Section 10) and (ii) pay to Lessor all amounts required under
Section 17(b) less the amount of the highest bid certified by lessee to lessor.
18. Purchase Option:
(a) Lessee may at lease expiration purchase all (but not less than all) of
the equipment in any Schedule on an AS IS BASIS for cash equal to its then fair
market value (plus all applicable sales taxes). Lessee must notify of its intent
to purchase the equipment in writing at least one hundred eighty (180) days in
advance. If Lessee is in default or if the lease has already been terminated
lessee may not purchase the equipment.
(b) "Fair Market Value" shall mean the price that a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's length transaction to a willing seller under no compulsion
to sell. In determining the Fair Market Value the Equipment shall be assumed to
be in the condition in which it is required to be maintained and returned this
agreement. If the equipment is installed it shall be valued on agree on the fair
market value at least one hundred thirty five (135) days before lease
expiration, lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee)to determine fair market value. The independent appraiser's
determination shall be final, binding and conclusive. Lessee shall bear all
costs associated with any such appraisal.
(c) Lessee shall be deemed to have waived this option unless it provides
Lessor with written notice of its irrevocable election to exercise the same
within fifteen (15) days after fair market value is told to lessee.
19. MISCELLANEOUS:
(a) LESSEE AND LESSOR UNCONDITONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF
ANY CLAIMOR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF
THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, and/or the
relationship that is being established between lessee and lessor. The scope of
this waiver is intended to be all encompassing of any and all disputes that may
be filed in any court. This waiver is irrevocable. This waiver may not be
modified either orally or in writing. The waiver also shall apply to any
subsequent amendments, renewals, supplements or modifications to this agreement,
any related documents, or to any other documents or agreements relating to this
transaction or any related transaction. This agreement may be filed as a written
consent to a trial by the court.
(b) The equipment shall remain Lessor's property unless Lessee purchase the
equipment from lessor and until such time lessee shall only have the right to
use the equipment as a lessee. Any cancellation or termination by Lessor of this
Agreement, any schedule, supplement or amendment hereto, or the lease of any
equipment hereunder shall not release from any then outstanding obligations to
Lessor hereunder. All equipment shall at all times remain personal property of
lessor even though it may be attached to real property. The equipment shall not
become part of any other property by reason of any installation in, or
attachment to, other real or personal property.
(c) Time is of the essence of this agreement. Lessor's failure at any time
to require strict performance by Lessee or any of any of the provisions hereof
shall not waive or diminish Lessor's right at any other time to demand strict
compliance with this agreement. Lessee agrees, upon Lessor's request, to execute
any instrument necessary or expedient for filing, recording or perfecting the
interest of Lessor. All notices required to be given hereunder shall be deemed
adequately given if sent by registered or certified mail to the addressee at its
address stated herein, or at such other place as such addressee may have specify
in writing. This agreement and any schedule and annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
(d) If lessee does not comply with any provision of this agreement, lessor
shall have the right, but shall not be obligated, to effect such compliance, in
whole or in part. All reasonable amounts spent and obligations incurred or
assumed by lessor in effecting such compliance shall constitute additional rent
due to lessor. Lessor shall pay the additional rent within five days after the
date lessor sends notice to lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of lessee's default.
(e) Any rent or other amount not paid to lessor shall bear interest, from
the due date until paid, at the lessor of eighteen percent (18%) per annum or
the maximum rate allowed by law. Any provisions in this agreement and any
schedule that are in conflict with any statute, law or applicable rule shall be
deemed omitted. Modified or altered to confirmed thereto.
(f) Lessee hereby irrevocably authorizes lessor to adjust the capitalized
lessor's cost up or down by no more than ten percent (10%) within each schedule
to account for equipment change orders, equipment returns, invoicing errors, and
similar matters. Lessee acknowledges and agrees that the rent shall be adjusted
as a result of the change in the Capitalized Lessor's Cost. Lessors shall send
lessee a written notice stating the final Capitalized Lessor's Cost, if it has
changed.
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
(h) Any cancellation or termination by lessor, pursuant to the provisions of
this agreement, any Schedule, supplement or amendment hereto, of the lease of
any Equipment hereunder, shall not release lessee from any then outstanding
obligations the lessor hereunder.
(i) To the extent that any schedule would constitute chattel paper, as such
term as defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this agreement in and of itself without the transfer or
possession of the original of a schedule executed pursuant to this agreement and
incorporating this agreement reference: and no security interest in this
agreement and the schedule may be created by the transfer or possession of any
counterpart of the schedule other than the original thereof, which shall be
identified as the document marked "Original" and all other counterparts shall be
marked "Duplicate".
IN WITHNESS WHEREOF, Lessee and Lessor have caused this Agreement to be
executed by there duly authorized representatives as of the date first above
written.
LESSOR LESSEE
General Electric Capital Corporation Internet Financial Services Inc.
By: /s/ Xxxxx X. Trinacrm By: /s/ Xxxxx Xxxxxxx
-------------------------------- ----------------------------
Name: Xxxxx X. Trinacrm Name: Xxxxx Xxxxxxx
Title: Senior Risk Analyst Title: President & COO
